St of TX v Us Epa_pfr

8/9/2019 St of TX v Us Epa_pfr

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IN THE UNITED STATES COURT OF APPEALSFOR THEFIFTH CIRCUIT1STATE OF TEXAS, 1

Petitioner, 11v. 1 Case No.1UNITED STATES ENVIRONMENTAL 1PROTECTION AGENCY, 11

Respondent. 11PETITION FOR REVIEW

Pursuant to Section 307(b)(l) of the Clean Air Act, 42 U.S.C. 7607(b)(l),the State of Texas hereby petitions for review of the fmal action of the respondent

- United States Environmental Protection Agency published in the Federal Registerat 75 Fed. Reg. 19468, et seq. (April 14, 2010) and titled, "Approval andPromulgation of Implementation plans; Texas; Revisions to the New SourceReview (NSR) State Implementation Plan (SIP); Modification of ExistingQualified Facilities Program and General Definitions; Final Rule."


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. . .

~ e s ~ e c t f u l l ~ubmitted,GREG.ABBOTTATTORNEY GENERAL OF TEXAS

sPe&al Assistant and Senior Counselto the Attorney General

J. REED CLAY, JR.Assistant Solicitor GeneralOffice of the Attorney General of TexasP. 0.Box 12548, Capitol StationAustin, Texas 78711-2548Telephone: (5 12) 475-0 13 1

, Facsimile: (5 12) 936-0545Email: bill.cobbO,oa~.state.tx.usATTORNEYS FOR THE STATE OF TEXAS


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CERTIFICATEOF SERVICEI cert ie that on June 11,2010, I served a copy of the foregoing Petition for

Review by Federal Express Delivery on the following:United States Environmental Protection AgencyOffice of the ~drninistrator1200 Pennsylvania Avenue, N.W.Washington, D.C. ,20460United States Environmental Protection AgencyOffice of the General Counsel

. ' 1200 Pennsylvania Avenue, N.W.Washington, D.C. 20460


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Appendix


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Wednesday,April 14, 2010

Part I1EnvironmentalProtection Agency40 CFR Part 52Approval and Promulgation ofImplementation PJans; Texas; Revisions tothe New Source Review ([NSR) StateImplementation Plan (SIP); Modficationof Existing Qualified Facilities Programand General Defmitions; Final Rule


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19468 Federal Register / Vol . 75ENVIRONMENTAL PROTECTIONAGENCY40CFR Part 52[EPA-R060AR-2005-TX-0025; FRL-9135-71Approval and Promulgation oflmplementatlon Plans; Texas;~evisionso the New source-Review(NSR) State lrnplementatlon Plan (SIP);Modiffcation of Existing QualiftedFaciflies Program and GeneralDefinitionsAGENCY: Environmental Protect ionAgency (EPA].ACTION: Final Rule. - - - - - - - --SUMMARY: EPA is taking final act ion todisapprove revisions to the SIPsubmitted by th e State of Texas thatrelate to t he M odification of Exist ingQualified F acilities (the QualifiedFacil i t ies Program or th e Program). EPAis disapprov ing th e Texas Qualif iedFacil i ties Program because i t d oes notmeet th e Minor NSR SIP requi rementsnor d oes i t meet the NSR SIPrequirements for a substitute Major NSRSIP revision.EPA is also aoorovine. threedefini t ions thai ar e sev&able from theQualif ied Facil i t ies submittals. The sethree defini t ions w e are approving are."arandfathered facilitv." "maximum$lowable emis sion ritb table (MAERT],"an d "new faci l ity." Moreover, w e aremaking a n administrat ive correct ion tothe S IP-approv ed d efinitio n of "facility."We are taking this action un dersection 1.10,part C, an d part D of th eFederal Clean Air Act ( the Act or CAA].DATES: Th is rule is effect ive on May 1 4,2010.ADDRESSES: EPA has established adocket for this act ion u nde r Docket IDNO .EPA-ROE-OAR-2005-TX-0025. Alldocum ents in the docket are l i sted onth e http://www.regulations.gov Website. Althougll l isted i n the index, someinformation is not publicly available,e.g., confidential business informationor other information w hose disclosure isrestr icted by statute. Certain oth ermaterial, su ch a s copyrighted material,is not placed on th e Internet and wil l bepubl ic ly avai lable only in ha rd copyform. Publicly available docketmaterials are available ei therelectronical ly throug h http://www.regulations.gov r in hard copy a tth e Air Perm its Secti on (6PD-R).Environmental Protect ion Agency, 1445Ross Avenue, S uite 700, Dallas, Texas75202-2733. T he fi le wil l be mad eavailable by app ointment for publicinspection in the Region 6 FOlA ReviewRoom between the h ours of 8:30 a.m.

i, N o. 71 / W e d n e s d a y , April 14, 2 0 1 0 / R u l e s a n d R e g u la t io n sand 4:30 p.m. weekda ys except for legal "NAAQS" mean s any nationalholidays. Contact the person l isted in ambient air quali ty standard establishedth e FOR FURTHER INFORMATION CONTACT under 40 CFR par t 50.paragraph below to m ake anappointme nt. If possible, please mak e, Table of Contentsth e appointment a t least two working 1, w ha tActiol, EPA .lgking?days in adva nce of your visit . There wil l 11,What submitt& EPA TakingN~ Actionb e a 1 5 cent pe r page fee for making On?photocop ies of documen ts. On th e day A. Subparagraph(Y) nder the definition ofof the visit , please check in a t the EPA "federally enforceable"Region 6 recep tion area at 1445 Ross B. Definition of "best ava ilabl e controlAvenu e, Sui te 700. Dallas, Texas. technology (BACT)"Th e State subm ittal, wllicll is part of C. Subparagraphs (A ) and (B) of thesubm itted definition of "m odification ofthe EPA record, is also available for existing facilitynpubl ic inspect ion a t th e Sta te Ai r D. Subparagraph (GI of the submittedAge ncy listed belo w du rin g official definition of "modification of existingbusiness ho urs by appointment: Texas facilitynCo-ission on Environ mental Quality, E. Trading Provision in 30 TAC 116.116[0office o f ~ i r ~ ~ l i ~ ~ ,2124 park 35 111.What Is the Background for This Ac tion?Circle, Aus tin, Texas 78753. A. Summary of Our Proposed ActionB. Summary of the Su bn~ ittals ddressedFOR FURTHER INFORMATION CONTACT: Mr. in this Final ActionStanley M. Spm iell , Air Permits Section C. Other Relevant Actions on the Texas(6PD-R), Environ mental Protection Permitting SIP Revision Subm ittalsAgency, Region 6, 1445 Ross Aven ue, A7.What h e he Grounds for ThisSuite 700. Dallas, Texas75202-2733, Disapproval Action of the TexasQualified Facilities Program?telephone (214) 665-7212; fax num ber A. Why the Qualified Egcilitie;Program214-665-7263; e-mail add ress - Submittal Is Unclear Whether It Is for [email protected]. Maior or Minor NSR SIP RevisionSUPPLEMENTARY INFORMATION:Throughout this docum ent, thefollowing terms have the meaningsdescribed below:"we," "us." a nd "our" refer to EPA."Act" or "CAA" means F ederalClean Air Act ."40 CFR" mea ns Title 40 of theCode of Fe deral Regulations-Protectionof Environment."SIP" means State ImplementationPlan a s established und er sect ion 110 ofthe Act."NSR" mean s new sou rce review, aphrase intended to encompass thestatutory and regulatory programs thatregulate th e construction andmodification of stat ionary sources a sprovided und er CAA section110(a)(2)(C),CAA Tit le I, parts C and D,and 40 CFX 51.160 through 51.166."Mino r NSR" mean s NSRestablished und er sect ion 110 of th e Actan d 40 CFR 51.160."Major NSR" means an y new o rmodified source that is subject to NNSRand/or PSD."NNSR" means nonattainmen t NSRestabli shed und er T i t l e I, section 110and par t D of the Act and 40 CFR51.165."PSD" means prevention ofsignificant deterioration of ai r quali tyestablished und er Tit le I, sect ion 11 0and par t C of the Act and 4 0 CFR51.166."Program" mea ns the SIP revisionsubmittals from th e TCEQ concerningthe T exas Qualif ied Facil i t ies Program.

B. wliy the Subm itted Texas QualifiedFacilities Program Is Not Approvable asa Su bstitu te Major NSR SIP RevisionC. Why the S ubmitted Texas QualifiedFac ilities Program Is Not Approvable asa Minor NSR SIP RevisionD Definition of "facility"V. Response to CommentsA. General CommenlsB. Comment Phat T his Action IsInconsistent With the CAAC. Comments Addressing Whether the

Qualified Facilities Rules Allow Sourcesto 'Net Out" of Major and M inor NSRThrough Rules that Are Not Adequate ToProtect the NAAQS and Slate ControlStrategiesD. Comments Addressing W hether theQualified Facilities Rules Are PracticallyEnforceableE. Comments Addressing Whether theQualified Facilities Rules Meet FederalRequ irements for Major NSRF. Comments Addressing Whether theQualified Facilities Rules Meet FederalRequirements fo r Minor NSRG. Comments Addressing W hether E xistingQualified Facilities Have Undergone anAir Quality AnalysisH. Comments on the Definitions of"Grandfathered F acility,""MaximumAllowable Emission Rate Table." and'New Facility"I. Com ments on the Definitions of "ActualEmissions." "Allowable Emissions.""Modification of Existing Facility" al (El.and "Qualified Facility"J. Com ments on the Defin ition of "BestAvailable Control Technology" ("BACT']K. Comments on Severable Portions of theDefinition of"Modification of ExistingFacilily" at 30 TAC 116.10(1 J(A) nd (B )L. Comments on th e Definition ofSeverable Subsection of 'Modification of


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Federal Register / Vol. 7:Existing Facility" al 30 TAC116.10(11)(C)

M. Comments on the Reinstatement of thePreviously Approved Definition of"Facility"N. C:omments on the Definition of the Term"Air Quality Account Number"0 .Comn~ents n Whether the QualifiedFacilities Rules Meet NSR PublicParticipation Requirements

VI.Final ActionVII. Statutory and Executive Order ReviewsI. What Action Is EPA Taking?

EPA is taking final action t odisapprove the Texas QualifiedFacilities Program, as submitted byTexas on March 13,1996,and July 22 ,1998, in Title 30 of the TexasAdministrative Code (30 TAC) at 30TAC Chapter 11 GC on tr ol of AirPollution by Permits for NewConstruction or Modification. Thisincludes the following regulationsunder Chapter 116: 30TAC 116.116(e),30 TAC 116.117,30TAC 116.118, andthe following definitions under 30 TAC116.10--General Definitions: 30 TAC116.10(1)-definition of "actualemissions," 30 TAC 116.10(2-definition of "allowable emissions," 30TAC 116.lO(ll)(E)under th e definitionof "modification of existing facility,"and 30 TAC 116.10(16)-definition of"qualified facility." These regulationsand definitions do not meet therequirements of the Act and EPA's NSRregulations. It is EPA's position thatnone of these identified elements for thesubmitted Qualified Facilities Programis severable from each other.Secondly, in an action separate fromthe above action on the submitted TexasQualified Facilities Program, we areapproving the following severabledefinitions: 30 TAC 116.10(8)-definition of "grandfathered facility," 30TAC 116.10(10)--definition of"maximum allowable emission rate table(MAERT)." and 30 TAC 116.10(12)-definition of "new facility."It is EPA'sposition that these definitions areseverable from those in the submittedTexas Qualified Facilities Program;moreover, each is severable from eachother.EPA proposed the above actions onSeptember 23,2009 (74 FR 48450). Weaccepted comments from the public onthis proposal from September 23.2009,until November 23.2009. A summary ofthe comments received and ourevaluation thereof is discussed insection V below. In the proposal and inthe Technical Support Document (TSD),we described our basis for the actionsidentified above. The reader shouldrefer to the proposal, the TSD, sectionIV of this preamble, and the Responseto Comments in section V of this

i, No . 71 / Wednesday, April 14 , 2010preamble for additional informationrelating to our final action.We are disapproving the submittedTexas Qualified Facilities Program asnot meeting the requirements for asubstitute Major NSR SIP revision. Ourgrounds for disapproval as a substituteMajor NSR SIP revision include thefollowing:It is not clearly limited to MinorNSR thereby allowing majormodifications to occur without a MajorNSR permit:It has no regulatory provisionsclearly prohibiting the use of thisProgram from circumventing t he MajorNSR SIP requirements thereby allowingchanges at existing facilities to avoid therequirement to obtain preconstructionpermit authorizations for projects thatwould otherwise require a Major NSRpreconstruction permit;It does not require that first anapplicability determination be madewhether the modification is subject toMajor NSR thereby exempting newmajor stationary sources a nd majormodifications from the EPA Major NSRSIP r uirements;1 3 o e snot include a demonstrationfrom the TCEQ, as required by 40 CFR51.166(a)(7)(iv), howing how the use of"modification" is at least as stringent asthe definition of "modification" theEPA Maior NSR SIP orowamIt does not inclu'de The requirementto make Major NSR applicabilitydeterminations based on actualemissions and on emissions increasesand decreases (netting) that occurwithin a major stationary source;It fails to meet the statutory andregulatory requirements for a SIPrevision;It is not consistent with applicablestatutory and regulatory requirements asinterpreted in EPA policy and guidanceon SIP revisions; andEPA lacks sufficient availableinformation to determine that therequested relaxation to the Texas MajorNSR SIP will not interfere with anyapplicable requirement concerningattainment and reasonable furtherprogress (RFP), or any other applicablerequirement of the Act.In addition to the failures to protectMajor NSR SIP requirements, EPAcannot find that the submitted Program,as an exemption to t he State's MinorNSR SlP program, will ensurenoninterference with NAAQSattainment, and there will not be aviolation of applicable portions of aTexas SIP control strategy, as requiredby section 110(a)(Z)(D) nd 40 CFR51.160(a)-(b). EPA cannot approve theexempting of certain modifications fromobtaining a Minor NSR SIP permit as

1Rules and Regulations 19469part of the Texas Minor NSR SIPbecause the Act and EPA regulations arenot [net and the State has not shownthat the sources will have only a deminimis effect. The Program fails toinclude legally enforceable proceduresto ensure that the State will not permita modification that will violate thecontrol strategies or interfere withNAAQS attainment. Our grounds fordisapproval as a Minor NSR SIPrevision include the following:

It is not clearly limited to MinorNSR thereby allowing majormodifications to occur without a MajorNSR permit;It has no regulatory provisionsclearly prohibiting the use of thisProgram from circumventing the MaiorNSR SIP requirements thereby allowingsources to avoid the requirement to

obtain preconstruction permitauthorizations for projects that wouldotherwise require a Major NSRpreconstruction permit;It does not require that first anapplicability determination be madewhether the modification is subiect toMajor NSR thereby exempting newmajor stationary sources and majormodifications from the EPA Major NSRSIP requirements;It fails to meet the statutory andregulatory requirements for a SIPrevision;It is not consistent with applicablestatutory and regulatory requirements as

interpreted in EPA policy and guidanceon SIP revisions;It is not an enforceable Minor NSRpermitting program;It lacks legally enforceablesafeguards to ensure that the exemptedchanges will not violate a Texas controlstrategy and will not interfere withNAAQS attainment;EPA lacks sufficient availableinformation to determine that therequested relaxation to the Texas MinorNSR SIP will not interfere with anyapplicable requirement concerningattainment and RFP, or any otherapplicable requirement of the Act.

The provisions in these submittalsrelating to the Texas Qualified FacilitiesState Program that include the Chapter116 regulatory provisions and thenonseverable definitions in the GeneralDefinitions were not submitted to meeta mandatory requirement of the Act.Therefore, this final action todisapprove the submitted TexasQualified Facilities State Prowam doesni t trigger a sanctions or ~e d i r a lImplementation Plan clock. SeeCAAsection 179(a).


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19470 Federal Register /Vol. i11. What Submittals Is EPA TakingNoAction On?A. Subparagraph (F ) Under theDefinition of "Federally Enforceable"

On September 18.2002 (67 FR 586971,EPA approved the definition of"federally enforceable" in 30 TAC116.10(7), introductory paragraph andsubparagraphs (A) through (E), assubmitted July 22, 1998. We proposed totake no action on the submittedseverable new subparagraph (F )underthe SIP-approved definition of "federallyenforceable," submitted September 11,2000, because it is outside the scope ofthe SIP. See 74 FR 48450. at 48466. EPAis not tinalizing action today on theproposal concerning the submitted 30TAC 116.10(7)(F).This subparagraph (F)is severable from the final rulemakingon the Qualified Facilities ProgramB. DeJinition of "Best Available ControlTechnology (BACT)"

On September 23,2009, EPAproposed to disapprove the definition"best available control technology(BACT)" under 30 TAC 1161.10(3). 74FR 48450. at 4846348464. EPA is stillreviewing approvability of thisdefinit ion; therefore, we are not takingfinal action on the roposal today. Thisdefinition is severagle from the finalrulemaking on the Qualified FacilitiesProgram. We will take final action onthe definition of BACT when we takeaction on Texas's submissionconcerning NSR Reform (Rule ProjectNumber 2005-010-116-PR), which alsoaddresses BACT. See 74FR48450, at48472.1 Under the Consent Decreeentered on January 21 ,2010 in BCCAAppeal Group v. EPA, Case No. 3:08-cv-02491-N (N.D. Tex), EPA's finalaction concerning NSR Reform will befinalized by August 31.2010.C. Subparagraphs [A) and (B )of theSubmitted Definition ofUModification ojExisting Facilitf

Also, on September 23,2009, EPAproposed to disapprove 30 TAC116.30(11) subparagraphs (A) and (B) ofthe submitted definition of"modification of existing facility,"which are severable from the othersubmissions addressed in this notice bulnot severable from each other. 74 FR48450, at 48464-48465. EPA is nottaking final action today on theproposed disapproval of these

'EPA made this determination in aseparateproposnd action published at 74 FU 48467,SeGemhar 23.2600. This proposal relates toPrevention of Sienificant Deterioration IPSDI.Nonattainrnent~ S RNNSR)or the 1097 a- ourO z o n ~tandanl. NSR Reform. and a StandardPennit.

'5 , No. 71 /Wednesday, April 14, 2030submitted subparagraphs under thesubmitted definition of "modification ofexisting facilitynat 30 TAG 116.0(11)[A)and (B). We are still reviewing theproposed disapproval of thesesubparagraphs 30 TAC 116.10(1l)(A)and (B) which relate to "insignificantincreases." These subparagraphs areseverable froin this final rulemaking onthe Qualified Facilities Program. Wewill take final action on 30 TAG116.10(11)(A)and (B) when we act onTexas's submission concerning AirPermits (SB 766) Phase I1 (Rule ProjectNumber 99029B-116-Al). Under theSettlement Agreement in BCCA AppealGroup v. EPA, Case No. 3:08-cv-01491-N (N.D. Tex), that action will befinalized by December 31,2012.Additionally, we have receivedpetitions requesting EPA review of theState's implementation of TexasCommission on EnvironmentalQuality's (TCEQ) permit by rule (PBK)program under Subchapter K (30 TACChapter 106).V PA intends to reviewTCEQ's PBR program and itsimplementation in response to thosepetitions.D. Subparagraph (G) of the SubmittedDefinition of "Modification of ExistingFacility"

On September 23,2009, EPAproposed to disapprove thesubparagraph (G )at 30 TAC 116.10(11)of the submitted definition of"modification of existing facility." See74 FR 48450. at 48465. EPA is not takingfinal action today on the proposeddisapproval of the submittedsubparagraph (G) f the definition of"modification of existing facility." Weare still reviewing the proposeddisapproval of this definition. Thissubparagraph states that changes tocertain natural gas processing, treating,or compression facilities are notmodifications if the change does notresult in a n annual emissions rate of anyair contaminant in excess of the volumeemitted at the maximum design capacityfor grandfathered facilities. Thisdefinition is severable from thisnilemakiilg on the Qualified FacilitiesProgram. See 74 FR 48450, at 48452. We

,will take final action on 30 TAC

. 116.10(ll)(G)when we act on Texas'ssubmission concerning Air Permits (SB766) Phase I1 (Rule Project Number2 Petitions. August 28 . 2008, from theEnvironmental integrity Projedon behnlf of theGalveston-Houston Association for SmogPrevention. Environmental integrity i)roject. TexasCampaign for the Environment. SierraClub, andPuhlic Citizen; and lanuary 5. 2009. sul~plen~enti ngthe August 28 .20 08, petition (the supplemmtalpetition added t h ~nvironmental Defense Fund asan additional petitioner).

/Rules and Regulations---99029B-116-Al). Under the SettlementAgreement in BCCA Appeal Group V.EPA, Case No. 3:08-cv-01491-N (N.D.Tex), that action will be finalized byDecember 31, 2012.E. Trading Provision in 30 TAG126.2 6(p

EPA proposed to take no action on thesubmitted portion of 30 TAC 116.116(f)that includes, among other things, atrading provision containing a cross-reference that is no longer in Texas'srules. See 74 FR 48450, at 4846548466.EPA is not taking final action today onthis submitted portion because we arestill reviewing approvability of tileprovision. This portion of the provisionis severable from this rulemaking on theQualified Facilities Program. We willtake final action on 30 TAG 116.116(f)when we take action on Texas'ssubmission concerning NSR RulesRevisions: 112Ial Revisions (RuleProject N 9806i-116-~1). Under theSettlement Agreement in BCCA AppealGroup v. EPA, Case No. 3:0&-cv-U1491-N (N.D. Tex), that action will befinalized by October 31.2011.HI. What Is the Background?A. Summary of Our Proposed Action

Also on September 23.2009 (74 FR48450), EPA proposed to disapproverevisions to the SIP submitted by theState of Texas that relate t o theModification of Qualified Facilities.These affected provisions includeregulatory provisions at 30 TAC116.116(e)and definitions of "actualemissions," "allowable emissions," anonseverable portion of the definition atsubparagraph (E) of "modification ofexisting facility," and 'qualified facility"under Texas's General Definitions inChapter 116, Control of Air Pollution byPermits for New Construction orModification. See 30 TAC 116.10(1). (2).(1 1)(E), nd [1.6], espectively. EPA findsthat these submitted provisions anddefinitions in the submittals affectingtlle Texas Qualified Facilities Programare not severable from each other.In the September 23,2009, EPA alsoproposed to take action on revisions tothe SIP submitted by Texas that relateto the General Definitions in Chapter116. EPA proposed to approve three ofthese submitted definitions,"grandfathered facility," "maximumallowable emissions rate table(MAERT)." and "new facility" at 30 TAC116.10(8), (lo) , and (12), respectively.These definitions are severable from theQualified Facilities Program.EPA proposed to make anadministrative correction to theseverable submittal for the SII1-approved


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Federal Register /Vol. 75 , No. 71 1Wednesday, April 14 , 2010 /Rules and Regulations 19471definition of "facility" under 30 TAC116.10(6). Consistent with our proposal,EPA i s finalizing this administrativecorrection in today's action.Specifically, EPA corrects atypographical error at 72 FR 49198(August 28, 2007), to clarify that thedefinition of "facility," as codified at 30TAC 116.10161. was a ~ ~ r o v e ds Dart of

and (2) subparagraphs (A) an d (B) of thesubmitted definition of "modification ofexisting facility," which are severablefrom the other submissions but notseverable from each other, and (3)subparagraph (G ) of the submitteddefinition of "modification of existingfacility." EPA proposed to take no actionon the severable submitted

116.116(fl that includes, among otherthings, a trading provision containing across-reference that no longer is inTexas's rules. See Section 11 for furtherinformation on why EPA is not takingfinal action today on these submittals.B. Summary of the SubmittalsAddressed in this Final Action

the Texas sip'in 2006 in d remaiAs subparagraph (F) for the SIP-approvedof the Texas SIP. 74 FR 48450, at 48465. severable definition of "federally Table 1 below summarizes theSee Sections I and IV for further enforceable" under 30 TAC 116.10(7) changes that are in the SIP revisioninformation on EPA's final action on the because the submitted paragraph relates sub'nittals- A summary E1'A'sabove submittals. to a federal proaram that is evaluation of each section and the basisFurther, EPA proposed to disapprove implement& separately from the SIP. In for this action is djscussed in Sectionsthe following severable definitions: (1) addition, EPA proposed to take no IV through VI of this preamble. Thethe submitted definition of "best action on the severable submitted Technical Support Document includes aavailable control technology (BACT)" portion of a provision at 30 TAC detailed evaluation of the submittals.TABLE -SUMMARYOF EACHSIP SUBMIT~ALHAT S AFFECTED BY THIS ACTION.

Section Title / / Description of changedates 1 proposed action.......................0TAC 116.1030 TAC 116.10(1) ..................

30 TAC 116.1 O(2) ..................

30 TAC 116.1O(6) ..................

30 TAC 116.1O(8) ..................

30 TAC 116.10(10) ................

3OTAC 116.10(12) ................30 TAC 116.1O(16) ................

30 TAC 116.116 .....................

General DefinitionsDefinition o "actual emis-sions".

Definition of "allowableemissions".

Definition of 'facility" ...........

Definition of "grandfatheredfacilrty".

Definition of "maximum al-lowable emission ratetable".

Definition of "modification oexisting facility".

...efinition o "new facilitynDefinition of "qualified facil-ity".

Changes to Facilities ...........

......................dded new definitionRepealed and a new definition sub-mitted as paragraph (1).......................dded new definitionRepealed and a new definition sub-mitted as paragraph (2).Revised paragraphs (2)(A) through(D). ......................d d edew definitionRepealed and a new definition sub-mitted as paragraph (4). Ap-proved 9/6/2006 (71 FR 52698).Redesignated to paragraph (6). In-advertently identified as non-SIP

provision in 8/28/2007 SIP revi-sion.Added new definition ......................Repealed and a new definition sub-mitted as paragraph (6).Revised definition.Redesignated to paragraph (8).Added new definition ......................Repealed and a new definition sub-mitted as paragraph (8).Redesignated to paragraph (10).Added new definition ......................Repealed and a new definition sub-mined as paragraph (9).Redesignated to paragraph (1 1).

......................dded new definitionRepealed and a new definition sub-mitled as paragraph (10).Redesignated to paragraph (12).Added new definition ......................Repealed and a new definition sub-mitted as paragraph (14).Redesignated to paragraph (16).......................dded subsection (e)Repealed and a new 116.116(e)submitted.

Disapproval.

Disapproval.

Administrative correction toclarify the definition o"facility" s in the SIP.

Approval.

Approval.

Disapproval of subpara-graph (E).

Approval.

Disapproval.

Disapproval.Disapproval.


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19472 Federal Register 1Vol. 75, No. 71 /Wednesday, April 14, 2010 Rules and RegulationsTABLE~-SUMMARYF EACHSI P S U B M I ~ A LHAT ISAFFECTEDY THISACTION.--Continued

Section litle I Sz$Fl I Desc"ption of change I Proposed actionI fied Facilities. / 7/22/1968 1 Repealed a d a new 116.1 17 r e II I . I I

C. Other Proposed Relevant Actions onthe Texas Permitting SIP RevisionSubmittals

30 TAC 116.117 .....................

30 TAC 116.118 .....................

The Settlement Agreement in BCCAAppeal Groupv. EPA, Case No. 308-cv-01491-N (N.D. Tex), as amended,currently provides that WA will takeFinal action on the State's PublicParticipation SIP revision submittal onOctober 29,2010. EPA intends to takefinal action on the submitted TexasFlexible Permits State Program by June30.2010. and th e NSR SIP by August 31,2010, as provided in the Consent Decreeentered on January 21,2010 in BCCAAppeal Groupv. EPA, Case No. 3:08-cv-01491-N (N.D. Tex).Additionally. EPA acknowledges andappreciates that TCEQ is developing aproposed rulemaking package to addressEPA's concerns with the currentQualified Facilities rules. We will, ofcourse, consider any rule changes if andwhen they are submitted to EPA forreview. However. the rules before ustoday are those of the current QualifiedFacilities program, and we haveconcluded that the current program isnot approvable for the reasons set out inthis notice.

311311 996ocumentation and Notifica-tion of Changes to Quali-

1V.What Are the Grounds for ThisDisapproval Action of the TexasQualified Facilities Program?

....re-Change Qualification

EPA is disapproving revisions to theSIP submitted by the State of Texas thatrelate to the Modification of QualifiedFacilities, identified in the above Table1. Sources are reminded that theyremain subject to the requirements oftlie Federally- approved Texas SIP andmay be subject to enforcement actionsfor violations of the SIP. See EPA's

Added new section .........................

Revised Guidance on EnforcementDuring Pending SIP Revisions, [March

Disapproval.

311311 9967/22/1998

. .1,199'i). ~o w & e r , ecause theQualified Facilities Program is apermitting exemption, not a permitamendment, this final disapprovalaction does not affect Federalenforceabilitv of Maior and Minor NSRSIP ermits.T K ~ rov isio ns ffected bv this

submitted. .........................dded new sectionRepealed and a new 116.118 sub-mitted.

disapGoval action include ;egulatory

Disapproval.

provisions at 30 TAC 116.116(e).116.117, and 116.118; and definitions at30 TAC 116.10(1), 2 ), (11)(E), nd (16)under 30 TAC Chapter 116, Control ofAir Pollution by Permits for NewConstruction or Modification. EPA findsthat these submitted provisions anddefinitions in the submittals affectingthe Texas Qualified Facilities Programare not severable from each other.Specifically, EPA is making thefollowing findings and taking thefollowing actions as described below:A . Why the Qualified Facilities ProgmmSubmittal Is Unclear Whether it Is for aMajor or Minor NSR SIP Revision

While the TCEQ and othercommenters asserted that the programwas intended t o be limited to MinorNSR, we continue to be concerned thatthe program is not explicitly limited toMinor NSR. Specifically, EPA finds thatthe submittals contain no applicabilitystatement or regulatory provision thatlimits applicability to minormodifications. The Program isanalogous to two other Minor NSRprogralns in Texas's SIP becausealthough they do not exempt facilitiesfrom NSR, as does the QualifiedFacilities Program, they do exemptfacilities from obtaining source-specific(i.e., ase-by-case) permits. However,both of the State's other Minor NSRprograms include an applicabilitystatement and a regulatory provisionthat expressly limits applicability tominor modifications.3 Moreover, theTexas Clean Air Act clearly prohibitsthe use of these two other Minor NSRprograms for Major NSR. See TexasHealth and Safety Code 382.05196 and.057. Therefore, the absence of theseprovisions in the Qualified Facilitiesrules creates an unacceptable ambiguityin the SIP. Without a clear statement ofapplicability of the Program, the

'The StandardPermits rules require a Major NSRapplicability determination at 30 TAC 116.610(b).and prohibit circumventionof MajorNSR at 30TAC I16.filO(c). ikewise, th e Permits by Ruleprovisions require a Major NSR applirabilitydetermi~lation t 30 TAG 106.4(a)(3). an d prohibitcircumvention of Major NSR at 30 TAC 106.41b).

Program as submitted is confusing to thepublic, regulated sources, governmentaaencies, or a court, because it can beiiterpreted as an alternative toevaluating the new modification as amajor movdification under Major NSRrequirements. Because of the overbroadnature of the regulatory language in theState's SIP revision submittal, we findthat the State has failed to limit itssubmitted Program only to Minor NSR.See 74 FR 48450, at 4845648457 andSection V.E.1 below for furtherinformation.Consequently, we evaluated thissubmitted Program as being a substitutefor the Texas Major NSR SIP. We alsoevaluated it for a~~rovabilitvs a MinorNSR SIP. ~ c c o r d i i ~ l ~ ,e eGaluatedwhether the submitted Prowam meetsthe requirements for a ~ a j g rSR SIPrevision, the general requirements forregulating construction of any stationarysources contained in Section110(a)(2)(C) f the CAA, and theapplicable statutory and regulatoryrequirements for an approvable SIPrevision. See 74 FR 48450, at 48457.B. Why the Submitted Texas QualifiedFacilities Progmm Is Not Approvable asa Substitute Major NSR SIP Revision

EPA finds that the State failed tosubmit information sufficient todemonstrate that the submittedProgram's regulatory text explici tlyprevents the circurnvention.of MajorNSR. Therefore, EPA is disapprovingthe IJrogram as not meeting the MajorNSR SIP requirements to preventcircumvention of Major NSR. See 74 FR48450, at 48458; Sections V.C.2. and E.below for further information.EPA finds that that the State failed tosubmit information sufficient todemonstrate that the submittedProgram's regulatory text requires anevaluation of Major Source NSRapplicability before a change isexempted from permitting, Therefore,EPA is disapproving the Program as notmeeting the Major NSR SIPrequirements that require the Major NSRapplicability requirements be met. See


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Federal RegisterIVol. 75, No. 71/Wednesday, April 14, 2010/Rules and Regulations 19473-74 FR 48450, at 48458: Section V.C.2 that the State will not permit a source and NSR netting because thesebelow for further information. that will violate the control strategy or principles are designed to ensure thatWe find that the Program is deficient interfere with NAAQS attainment, as there is no interference with thefor Major NSR netting for two main required by 40 CFR 51.160(a)-(b]. 74 FR NAAQS and control ~t rat eg ie s.~hereasons. First. the Program may allow an 48450, at 48460. The State failed to Major NSR netting program requires theemission increase to net out by taking demonstrate that this exemption will following: (I ) An identifiedinto account emission decreases outside not permit changes that will violate the contemporaneous period, ( 2 ) theof the major stationary source and, in Texas control strategies or interfere with reductions must be contemporaneousother circumstances. allow an NAAQS attainment. Therefore, we are and creditable, (3) the reductions mustevaluation of emissions of a subset of disapproving the submitted Qualified be of the same pollutant as the change.units at a major stationary source. Facilities Program as a Minor NSK SIP (4) he reductions must be real, (51 theTherefore. the Program does not meet revision because it does not meet reductions must be permanent, and (61the CAA's definition of "modificationn sections 120(a)(2)(C) nd 110(1) of the the reductions must be quantifiable. Se eand the Major NSR SIP requirements Act and 40 CFR 51.160. 40 CFK 51.'165(a)(l)(vi) the definition ofand is inconsistent with Alabama Power The Qualified Facilities Program does "net emissions increasen); 40 CFRV . Costle, 636 F.2d 323, 401-403 (DC not ensure protection of the NAAQS 51.166@)(3).TObeCir. 1980) and Asarco v. EPA, 578 F.2d and prevent violations of any State creditable, the reduction's old level of320 (DC Cir. 1978). 74 FR 48450, at control strategy. First. the Program fails emissions must exceed the new level of48458-48459; Section V.C.1 below. to ensure that all participating Qualified emissions, the reduction must beSecond, the Program authorizes existing Facilities must have obtained a Texas enforceable as a practical matter at andallowable emissions, rather than actual NSR SIP permit. Without the assurance after the time tile actual change begins,emissions, to be used as a baseline to that all Qualified Facilities have and the reduction must havedetermine applicability. This use of obtained a Texas NSR SIP permit, EPA approximately the same qualitativeallowables is inconsistent with tlie cannot determine that all Qualified significance for public health andrequirements of the Act for Major NSR Facilities must have Federally welfare as that attributed to the increaseand is contrary to New York v. EPA, 413 enforceable emission limitations based from the particular change. see74 FRF.3d 3, 38 40 (DC Cir. 2005) ("New York on the chosen control technology, and 48450. a t 48461.I").74 FR 48450, at 48459; Section V.C.1 that the Qualified Facility will not As discussed below, the Program'sbelow. interfere with attainment and netting provisions d o not meet all of theEPA finds that it lacks sufficientavailable information to determine, maintenance the NAAQS Or requirements; therefore, the Qualifiedany strategy. EPA Facilities netting is disapproved as apursuant to section 110(1) hat the finds that the Qualified Facilities Minor NSR netting program.requested relaxation to the Texas NSR Program is inadequate to ensure that all , he Program fails to define aSIP would not interfere with any Qualified Facilities have an appropriate contemporaneous or other period for theapplicable requirement concerning allowable limit to prevent interference netting and that the emission reductionsattainment and RFP, r any other with attainment and maintenance of the must occur tllat specified period.applicable CAA requirement. See 74 FR NAAQS or violations of any State 74 FR 48450, at 48461; Section V.C.148450, at 48459 for further information. control strategy that is required by the below.C. the Submitted TexasQualified Texas NSR SIP. See Section V.G.1 for Emissions reductions under tlie~ a c i l j , j e s rosom Is Not Approva~le further information. In addition, the Qualified Facilities program are nota Minor NSR SIP Revision Program does require the Owner Or enforceable as a practical matter at andoperator to maintain the information the time of th e actual changeEPA finds that the Program is notclearly limited to Minor NSR. The an d showing how it begins; and therefore, not sufficientlysubmitted Program also does not that there '0 adverse O n creditable. ~ i r ~ t ,he Program fails toanbient air quality before undertaking ensure a separate netting analysis isPrevent circumventionof the Major NSR the change. Therefore, EPA finds that performed fo r each pmposedSIP requirements. The Program lacks the Qualified ~ ~ ~ i l i t i ~ ~rogram isrequirements necessary for enforcement inadequate to ensure that all changes because the rules are not clear thatof the applicable emissions limitations, under the program that are exempted reductions can only be relied uponincluding a permit application and from permitting will not prevent once. Therefore, we find that theissuance process. Overall, the Program interferance with attainment Program fails to prevent doublefails to include sufficient legally maintenance of the NAAQS or counting; and consequently these typesenforceable safeguards to ensure that the violations of an y state control of reductions are not creditable. Second*NAAQS and control strategies are that is required by the T~~~~ SR SIP. the Program reuire that eachprotected. Furthermore, the Program 74 FR 48450, at 48462; Section v.F., Qualified Facility in theprovides a de minimis exemption from Regarding the State's use of minor netting transaction must submit athe Texas Minor NSR SIP, and therefore, source netting in the Qualified Facilities permit a~pl icati on nd obtaina permitit is a SIP relaxation, which creates a Program, EPA makes the following revision reflecting all of the changesrisk of interference with NAAQS findings: made to reduce emissions (relied uponattainment, RFP, or any other The Qualified Facilities Program is in the netting analysis) as well asrequirement of the Act. EPA lacks inadequate because it fails to provide reflecting the change itself thatsufficient information to determine that clear and enforceable requirements for a increased emissions- As a result*this SIP relaxation would not interfere basic netting program. Therefore, this emissions reductions are notwith these requirements. 74 FR 48450, Program, as submitted. does not meet enforceable; and therefore. notat 48463. Additionally, the legal test for the fundamental requirements for anwhether a de minimis threshold can be approvable Minor NSR netting program. However. our analysis of netting pmvisionsapproved is whether it is consistent To analyze the Program's Minor NSR NSR' heQUalifieds not intended to create n bindingnder gencyinorwith the need for a plan to include netting for approvability. we used the ps it io n on evaluating the appmvability olMinorlegally enforceable procedures to ensure fundamental principles of Major NSR NSR netting.


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19474 Federal Register I Val. 75 , No . 71 /Wedne sday, April 14 , 2010 Rules and Regulationssufficiently creditable. 74 FR 48450, at48462; Section V.C.1.EPA proposed to find that theState's "interchangen methodology,submitted 30 TAC 116.116(e)(3), sconsistent with the Federal requirementthat reductions must be of the samepollutant as the change.5 74 FR 48450,at 48461. However, after evaluation ofreceived comments, EPA finds that theterm "sulfur compounds" in 30 TAC116.116(e)(3)(F),s broad enough toinclude hydrogen sulfide. Hydrogensulfide is a regulated NSR pollutant (see40 CFR 52.21(b)(23)(i)and 52.21(i)(5)(i))and, in certain instances, may requireseparate analysis from sulfur oxides ina netting analysis . Therefore, theinterchange methodology may notensure the health impacts of all sulfurcompounds will be equal. The Statefailed to demonstrate that such use ofhydrogen sulfide would protect thesulfur dioxides NAAQS. Additionally,this provision allows PM-2.5 to beinterchanged with PM-10. However.because PM-10 and PM-2.5 are twoseparate pollutants and the State failedto demonstrate that such use of PM-10would protect the PM-2.5 NAAQS, thisinterchange is inappropriate . Therefore,this provision is unapprovable for thesulfur dioxides and PM NAAQS.Section V.C.1 below.The Rogram also lacks anyprovisions that require the reductions tobe permanent. Specifically, thesubmitted Program does not includeprovisions that either prohibit futureincreases at the Qualified Facility, orensure that any future increase at aQualified Facility at which a previousnetting reduction occurred is analyzedin totality to assure that the NAAQSremains protected from the originalincrease. 74 FR 48450, at 48461; SectionV.C.1 below.Section 30 TAC 116.117(b] lacks anyprovisions that require a permitapplication to be submitted to TCEQ fora change under the Program. There areno provisions in 30 TAC 116.117(b) thatclearly indicate that TCEQ must issue arevised permit for the changes made byall of the participating QualifiedFacilities. Thus. EPA finds that theProgram is not approvable because itlacks this requirement and therefore isnot enforceable. See 74 FR 48450, at48462. Section V.D.l below.The Qualified Facilities SIP submittalis a relaxation under CAA section I 10(1)because it provides an exemption fromNSR permitting not previously available


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Federal Reister l V o l . 75, N o. 71 1W e dn es da v. A ~ r i l 4 . 2010 /Rules and Regula t ions 19475cause. These off-permit changes aredifficult to track and enforce and maythreaten ambient air quality.The lack of un derstan dab le an dtraceable permits. Texas indu stry,regulators. and the public sho uld beable to obtain a pen nit, read it, andknow what quantity of what pollutantsthe facility is authorized to em it. Theoff-permit changes authorized throug hthe Qu alified Facilities rules preventsuch transparency.Comment: Houston R egional Group ofthe Sierra Club (Sierra Club) supportsEPA's analysis and ag rees that all of theSeptember 23, 2009, proposals(including the Qualified FacilitiesProgram) should be disapp roved. Th ecommenter generally supported EPA'sproposed d isapproval of the QualifiedFacilities Program; Flexible PermitsProgram; and Texas M ajor and MinorNSR SIP for 1997 8-hour an d 1-hou rozone NAAQS, Prevention ofSignificant D eterioration (PSD) SIP, andStandard Permit for Pollution ControlProjects. The commenter providedadditional comments on our proposeddisapproval of the Flexible PermitsProgram, which EPA will a ddress i n itsseparate action on the Flexible PermitsProgram.Response: Generally, these comm entssupport EPA's analysis of Texas'sQualified Facilities Program asdiscussed in detail at 74 FR 48450, at4845 548 463 . and further support EPA'saction to disapprove t he QualifiedFacilities subm ission.Comment: The Sierra ClubMembership Services (SCMS) sen tnumerou s similar letters via e-mail thatrelate to this action. These com mentsinclu de 1,789 dentical letters (sent viae-mail), which included t he followingcomments:The TCEQ is broken an d thecommenters applaud EPA's proposedruling that m ajor portions of th e TCEQair permitting program does not adhe reto the CAA and should be thrown out;While agreeing that th e proposeddisapprovals are a good first step, thecomm enters state that EPA s hou ld takebold action s as follows:-Halting any new air pollution permitsbeing issued by TCEQ utilizing

TCEQ's cu rre nt illega l po licy ;--Creating a moratoriuln on theoperations of any new coal firedpower plants in Texas until TCEQcleans up its act by operating underthe Federal CAA;-Requiring coal compan ies clean uptheir old, dirty plants-no exceptions,no bailouts, and no specialtreatment-by reviewing all perm itsissued sinc e TCEQ adopted its illegal

policies and requiring that theseentitie s resubmit their applications inaccordance with t he Federal CAA;and-Put stronger rules in place in order toredu ce global-warming emissions andto make sure new laws and rules donot allow e xisting coal plants tocontinue polluting with globalwarming emissions.

The commenters further state thatTexas: (1) Has more proposed coal a ndpet coke fired power plants than anyother state in the nation; (2) Is number1 n carbon emissions; and (31 Is on thelist for the largest increase in elnissionsover the past five years.

The comm enters do not want coalto stand in the way of a clean energyfuture in Texas. Strong rules are neededto make sure the coal industry is heldresponsible for their mess and that nopermits are issued under TCEQ's illegalpermitting process. Strong regulationsare vital to cleaning u p the energyindustry and putting Texas on a path toclean energy technology that boostseconomic growth. creates jobs in Texas.and p rotects the air quality, health, andcommunities.In additio n. SCMS sent 273 similarletters [sent via e-mail) that containedadditional comments. These additionalcomments includ e the following:Commenters suggest that T exas relyon w ind power, solar energy, andnatural gas as clean alternatives to coal.Other com ments expressed general

concerns related to: Impacts on globalwarming, lack of commitment by TCEQto protect ai r quality, the need for cleanenergy efficient growth, impacts of uponhuman health, endangerment ofwildlife, impacts on creation of futurejobs in Texas, plus num erous othersimilar concerns.Response: To the extent the SCMSletters comment on th e proposeddisapproval of the Qualified Facilityprogram, they supp ort EPA's action todisapprove the Qualified Facilitiessubmission. The remaining commentsare outside th e scope of ou r proposedaction relating to the Qualified FacilitiesProgram.Comment: The Environmental Clinic,the U niversity of Texas at Austin Schoolof Law (UTEnvironmental Clinic)commented that EPA should disapproveseveral ot her sec tions of 30 TAGChapter 116.Response: This final rulemaking onlyaddresses th e Qualified FacilitiesProgram. Therefore, issues related toother portions of Texas's regulations areoutsid e the scope of this rulemaking.

2. Comments Generally OpposingProposalComment: TCEQ provided severalgeneral comments on the proposal. TheTCEQ commented that t he Qualified

Facilities Program was d eveloped by the74th Texas Legislature through SenateBill (SB) 1126, whic h be came effectiveMay 19.1995. SB 1126 amended theTexas Clean A ir Act by revising thedefinition of "modification of existingfacility," wh ich c hanged tlie factors usedto determine wh ether a modification forState perm itting (i.e. Minor NSR) hasoccurred. In 199 6.30 TAC Chapter 116was revised to incorpo rate thislegislative directive. These changesprovide that modifications may be madeto existing facilities without triggeringthe State's Mino r NSR requirementswhenever: (1)The facility to bemodified has received a permit, permitamend ment, or has been exe mpted frompermitting requirements no earlier than120 months from when the change willoccur: or (2 ) uses air pollution controlmethod s that a re at least as effective asthe M inor NSR SIP best availablecontrol techn ology (BACT) that th eCommission required 120 months beforethe change will occur. Such facilities aredesignated as "qualified facilities."TCEQ has always con sidered tlieQualified F acilities Program to beapplicable only to M inor NSR an d notapplicable to Major NSR, although th isis not specifically stated in th e rule. Insumm ary, under th e Qualified FacilitiesProgram, TCEQ: (1) Determine s Fed eralapplicability as a first step in processinga Qualified Facilities request; and usesactual emissions, not allowableemission rates; (2) app lies Federal NSKrequirements w hen triggered; (3) doesnot circumven t Federal requirementsapplicable to major stationary sources ormajor modifications; (4) considers theuse of "modification" to be separate andseverable from the Federal definition of"modification" as reflected in the SIP-app roved Majo r NSR Program ; and (5)does not violate the approved SIP withregard to M ajor NSR or M inor NSRProgram requirements.Comment: The Texas ChemicalCouncil (TCC] comm ents that it wouldbe short-cited to analyze the threeprograms (Qualified Facilities, FlexiblePermits, an d NSR R eform) apart fromthe dramatic improvements in the airquality in Texas in the past 1 5 years.TCC goes on to d escribe theseimprovem ents. TCC suppo rts Fullapproval of Qualified Facilities. TheQualified Facilities Program is notintended to shield a source from majorNSR. The Program is a robust. Fe derallgenforceable program. The Q ualified


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19476 Federal Register / Vol. 75,No. 71 /Wednesday, April 14, 2010 /Rules and RegulationsFacilities Program is authorized by the proposed disapprovals because the SIP lose its status as "qualified" if its permit,TCAA, promotes flexibility, and allows as implemented by TCEQmeets or exemption, or control method fallssources to make certain changes without exceeds CAA requirements and bas met outside the 10-year window. See Texastriggering NSR. If Major NSR is the goals of the CAA; (2) EPA has a Nat'l Res. Conservation Comm'n,triggered, a facility cannot be a history of focusing on results; so, EPA Modification of Existing Facilities underQualified Facility. The definition of a should look beyond immaterial Senate Bill 1126: Guidance for AirQualified Facility makes it clear that a differences in the rule provisions and Quality, (April 1996). 5 [hereinafterQualified Facility is an existing facility. focus on the positive results that Texas Modification of Existing FacilitiesA Qualified Facility may make a has achieved under the TCAA and the Guidancel.physical change in or change the State's submittals; (3) Texas sources Comment: Texas Oil & Gasoperation of that facility as long as the have relied on the submitted rules for as Association (TxOGA) is encouraged thatchange does not result in a net increase long as 15years in some cases. TO EPA is taking action to provide certaintyin allowable emissions of any air disapprove the submittals after so long in the regulatory process for businesses.contaminant and does not result in the puts too much burden on the regulated TxOGA supports the ongoing goal ofemission of any air contaminant not community, creates regulatory improved air quality; however,previously emitted. Additionally, the uncertainty, hurts the vulnerable commenters do not believe that thefacility must be using equipment at least economy by potentially increasing proposed disapproval does anything toas effective as the BACT required by compliance costs, and may discourage improve air qnality in Texas. Further,TCEQ*TCC SuPPofls full approval of the future business expansion; and [4) the proposal may discourage futurethree Texas air permitting program GCLC requests that EPA work business expansion in Texas.submittals. The SIP revisions submitted col]aboratively, not combatively, with Response: EPA understands T a Q ' sto EPA by TCEQ over the last 15 years ~ a ~ t ~esolve an y issues under the explanation of the origination of theare critical components to Texas air CAA. Program in SB 1126. Nonetheless, thepermitting program. Texas should not Qualified Facilities Program must meetComment: Baker Botts, LLP*counsel all Federal requirements under the CAAe punished for EPA's to act fo r Texas Industry Project (TIP) and in order to be approvable. The fact thatithin the timeframe in the Business Coalition for Clean Air (BCCA) Ep A failed to act on theAA. EPA offers little or no legal provided the following comments. TIP Facilities SIP revisionjustification for proposing disapprovalof these programs. EPA's proposed and BCCA sup!or of the statutory timeframe does not dictateQualified Facilities because theaction will have an enormous impact on submittal wil l strengthen Texas,s the action EPA must take on thethe country's largest industrial state. Program at this time. We cannotThe SIP revision submittals for these permitting program. work approve a program that fails to meet theprograms are at least as stringent as he with TCEQto the requirements of the CAA. AS discussedapplicable Federal requirements and Qualified Program' Furthers throughout our proposal and this finalshould be fully approved. under Texas's integrated air permitting notice, current ~ ~ ~ l i f i ~ d~ ~ i l i t i ~ ~comment: ~ ~ ~ ~ ~ ~ l l &iu]iani LLP, regime, air quality in the state is Program fails to meet all requirements.counsel to the Electric Reliability demonstrating strong, sustained We disagree with commenters that theCoordinating Council (ERCC), improvement. Commenters describe the ~ ~ ~ l i f i ~ , j~ ~ i l i t i ~ ~rogram iscommented that Qualified Facilities ai r quality improvements in Texas in exclusively a Minor NSR program,provides incentives to implement the recent past. Finally, commenters based upon the alnbiguities in thepollution reduction measures at existing describe their understanding the Program's rules. Furthermore, EPA needfacilities. EPA's proposed disapproval Qualified Facilities Program operates. not prove that the Program is actuallydoes not any that this Qualified Facilities is a Minor NSR used for major ~nodif ications. PA isauthorization is actually used for major applicability trigger that a l l ~ w sxisting required to review a SIP revisionmodifications or in fact interferes with emissions facilities that employ BACT submission for its compliance with theair quality improvements. to make changes without Minor NSR ~~t and EP A regulations. CAADiscontinuance of this rogram could review as 10% as the changes do not 110(k)[3]; Natural Resources Defensedeter or delay many po&tion reduction r e ~ ~ l tn net emissions increases. The Council, Inc. v. Browner, 57 F.3d 1122,measures because the cost and resources Qualified ~a ci li ti es rogtam is 1123 (D C Cir. 1995); Americanassociated with a full notice and authorized by the TCAA and applies Cyanamid v. EPA, 810 F.2d 493,495comment case-by-case permit only to existing facilities. The term (5th Cir. 1987). This includes anoutweigh the economic benefits of the nfacility" is analogous to the Federal analysis of the submitted regulations foradditional controls. EPA should definition of "emissions unit," under their legal interpretation. The Program'sdetermine that the Qualified Facilities Texas's Title V program. See 30 TAC rules are ambiguous and therefore doProgram satisfies the CAA requirements 122.10(8). The Texas Legislature created not adequately prohibit use under Majorfor a state minor source program and the Qualified Facilities Program as an NSR. We recognize that TCEQ considersretract the SIP disapproval and approve incentive for sites to implement BACT. the Program to be a Minor NSR Program;this S P evision. EPA should recognize TO be "qualified," the source must (1) however, the State admits that its rulesthe validity of permits issued under the have a permit or permit amendment or are insufficient to limit the Program toTexas permitting program and refrain exempt from pre-construction permit Minor NSR. See 74 FR 48450, at 48456-from taking enforcement actions to requirements no earlier than 120 48457; Section V.F. below for furtheraddress EPA concerns. months before the change will occur, or information.Comment: Jackson Walker, LLP, (2) use air pollution control methods EPA enforcement of Federalcounsel to Gulf Coast Lignite Coalition that are at least as effective as the BACT requirements in Texas is outside theGCLC, provided the following general that was required or would have been scope of this rulemaking. Additionally.comments on all three proposed required for the same class or type of comments on the Flexible Permitsdisapprovals (Qualified Facilities, facility by a permit issued 120 months Program and the NSR Reform submittalFlexible Permits, and NSR Reform): ( I ) before the change will occur. See 30 are outside tlie scope of this notice. EPACommenters disagree with all the TAC 116.116[e). A qualified facility may will address the comments on its


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Federal Register / Vol. 75proposed disapprovals of FlexiblePermits and NSK Reform in separateactions on these programs.B. Comments Thot This Action IsInconsistent With the CAAComment: ERCC commented thatEPA's proposed disapprovals are notrationally supported by case law and areinconsistent with the CAA. Congressplaced primary responsibility fordeveloping SIPs on the states, sopermitting programs among states canvary greatly. EPA determines whetherthe state SIP satisfies the minimumrequirements of the CAA. Union ElectricCo. v. EPA. 427 U.S. 246 [1976),rehearing denied 429 U.S. 873 (1976);Troin v. NRDC, 421 U.S. 60 (3975);Florida Power and Light Co. v. Costle,650 F.2d 586 (5th Cir. 1979); 71 FR48696,486700 (August 21,2006)(Proposed rule to promulgate a FIPunder the CAA for tribes inIndiancountry). The Fifth Circuit Court ofAppeals recently stated that "EPA hasno authority to question the wisdom ofa State's choice of emission limitationsi f they are part of a SIP that otherwisesatisfies the standards set for in 42U.S.C. 7410(a)(2).*Clean Coalition v.TXU Power, 536 F.3d 469 Fn.3 (5th Cir.Tex. 2008). Texas's permitting programsare based on the recognized Minor NSRflexibility and consistent with prior EPAapprovals of other state SIPs. EPA mustreview other approved state programs toensure that Texas's sources are not putat a competitive disadvantage. SeeMemorandum from John Seitz, Director.OAQPS, SIP Consistency Process (April4,10. 1996). EPA's proposeddisapprovals could have dramaticimpact on industries in Texas. EPAshould. solicit comments from all EPAregions on whether the proposed actionsare inconsistent with other state SIPSand compare the stringency of the Texasprograms to those of other states. ERCCis confident that EPA will realize thatthe Texas programs are consistent andpossibly more stringent than otherpermitting programs throughout thecountry.Response: EPA continues to recognizethat permitting programs among statescan vary greatly and provide someflexibility for Minor NSR SIP programs.However, in order to be approved aspart of the SIP, the Qualified FacilitiesPrograrn must meet all applicableFederal requirements: Here, thecommenter's reliance on the FifthCircuit's dicta in Clean Coalition ismisplaced because the QualifiedFacilities Program does not meet thestandard set in 42 U.S.C. 7410(a)(2)(C).Section 42 U.S.C. 7410(a)(2)(C) equiresthe State to have a permitting program

i, No . 71 / Wednesday, April 14, 2010that complies with PSD andNonattainment New Sowce Review(NNSR) permit requirements (at 42U.S.C. 7475 and 7503, respectively), aswell as Minor NSR permit requirements.As part of the State's permittingprogram, the Qualified FacilitiesProgram fails to meet theserequirements of the Act. As discussedthroughout our proposal and this finalaction, the submitted Program fails tomeet all reauirements for an a~or ov ab le..permitting program. includingsubmittine information sufficient todemonstrite that the Program isrestricted only to Minor NSR.Commenters argue that the QualifiedFacilities Program is consistent withother SIP approved programs; however,they fail to cite any specific examples.C. Comments Addressing Whether theQualified Facilities Rules Allow Sourcesto "Net Out" of Major an d Minor NSRThrough Rules Thot A? Not AdequateTo Protect the NAAQS and StateControl Strategies1.Comments Generally SupportingProposal

Comment: UT Environmental Cliniccommented that the Qualified FacilitiesProgram fails to meet the nettingrequirements for several reasons. Thecomrnenter notes that the QualifiedFacilities Program netting calculationscall be based on allowable emissions.Allowables netting violates Major NSRbecause it is inconsistent with State ofNew York v. EPA, 413 F.3d 3. 40 (DCCir. 2005) and violates the CAA; itviolates Minor NSR because it fails torequire an evaluation of the actualemissions impacts on maintenance ofthe NAAQS.Response: Generally, these commentssupport EPA's analysis of Texas'sQualified Facilities Program as asubst itute for a Major NSR SIP programas discussed in detail at 74 FR 48450,at 48459. and further support EPA'saction to disapprove the QualifiedFacilities submission.We find that the Program authorizesexisting allowable, rather than actualemissions, to be used as a baseline todetermine applicability. This use ofallowables violates the Act for MajorNSK SIP requirements and is contrary t oNew York v. EPA, 413 F.3d 3, 3 8 4 0 (DCCir. 2005) ("New York In).74 FR 48450,at 48459. Under the submitted Program,the ~r oiec t's ncreases in emissions arecalAlaied based upon its projectedallowable emissions. The baseline usesthe permitted allowable emission rate(lowered by any applicable state orFederal requirement) if the facility"qualified" under 30 TAG

11 ules and Regulations 19477116.10(11)(E)(i).f the facility"qualifiedn under 30 TAC116.10(ll)(E)(ii),he baseline uses theactual emission rate (minus anyapplicable state or Federal requirement).In the applicability netting analysis, thebaseline for all the other participatingminor and major existing QualifiedFacilities is calculated in the same way.The emission reductions are calculatedsimilarly, i.e., reductions I~eyondhepermitted allowable or actual emissionrates [minus the a~ ~ li c ab letate andFederal requirem&ts). Thus. thissubmitted Program allows an evaluationusing allowab~e, ot actual emissions, asthe baseline to calculate the project'sproposed emission increase and formany of the netting emissionreductions, thereby in many casespossibly circumventing the majormodification applicability requirementsunder the Major NSR rules. Therefore,the Program fails to meet the CAA andMajor NSR requirements to use baselineactual emissions for major sourcenetting as the starting point from whichthe amount of creditable en~issionincreases or decreases is determined. 74FR 48450. at 48459.EPA agrees that the reductions in theI'rogram's netting are not based onactual emissions. Such netting may bepermissible for a Minor NSR Program;provided that the netting provisionsassure protection of the NAAQS and theSIP control strategies as required bysection llO(a)(Z)(C) f the CAA.Allowables netting is acceptablebecause CAA section 110(a)(2)(c)doesnot explicitly prohibit the use ofallowables netting for Minor NSRprograms. However, Texas failed tosubmit sufficient information todemonstrate that the use of allowableemissions in a Minor NSR nettingprogram continues to protect theNAAQS and control strategies;therefore, EPA cannot determine if thisrequirement is met. Today's rulemakingdisapproves netting under the QualifiedFacilities Program as a Minor NSRprogram, in part because the Programfails to ensure that ambient air isprotected in consideration of all changesin the netting.Comment: UT Environmental Cliniccommented that the definitions insection 116.10 do not adequately specifyhow to calculate emissions reductionsfor purposes of the netting analysis. Forexample, the Texas definition of actualemissions is the "highest rate" actuallyachieved within the past 10 years. It isunclear whether this is the highestemission rate achieved at a single pointin time or averaged over some eriod.Response: We disagree that treductions are not quantifiable. The


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19478 Federal Renister1Vol. 7 5. No. 71 / Wednesdav. April 14, 201--netting is based on the most stringent ofthe permitted emissions rate (whic11includes the highest achievable actualemission rate) or any applicable state orFederal rule. Nothing in the State'sdefinition of "actual emissionsn impliesat all that there is any averaginginvolved in the calculations. Thereduction is based upon the highest ratethe facility achieved at a single point intime, looking back the past 10 earsWhile we proposed to find tl at thereductions were quantifiable, werequested comments on two aspects ofthe Program as it relates to thisprinciple. 74 FR 48450, at 4846148462.First, we requested comment onwhether the regulatory provisions at 30TAC 116.10(1) and (2) provide cleardirection on the appropriate calculationprocedures sufficient to ensure thereductions are quantifiable. As statedabove, we disagree with thecommenter's argument that thedefinitions in section 116.10 do notadequately specify how to calculateemissions reductions for purposes of thenetting analysis.Second. the submitted rules providethat a Qualified Facility nets itsemissions increase on the same basis asits allowable emissions limitation. 30TAC 116.116(e)(3)[A).We requestedcomment on whether netting on such abasis is sufficiently quantifiable, andwhether any additional provisions arenecessary to ensure that the entireemissions increase is properly nettedagainst reductions from the otherQualified Facility. We did not receiveany comments on this second aspect ofquantifiability under the Program.Because no comments were submittedshowing the basis was not sufficientlyquantifiable, we continue to believe thatnetting for a Minor NSR SIP program onthe adequacy of the Program's netting ofemissions increases on the same basis asits allowable emissions limitation, issufficiently quantifiable.Comment: UT Environmental Cliniccommented that the Qualified Facilitiesrules allow all emission reductions atthe same account number to beconsidered in the net emissioncalculation. In fact, the rules could beread to allow the "offsetting" ofemissions above allowables bydecreases in emissions at any "differentfacility." 30 TAC 116.110(3).Because anaccount number can include multiplesources, the Texas rules allowconsideration of emission decreasesfrom outside the major stationary sourcein violation of 42 U.S.C. 7411(a).Response: Generally, these commentssup ort EPA's analysis of Texas'sa ified Facilities Program as auPsubstitute for a Major NSR SIP program

as discussed in detail at 74 FR 48450.at 48458-48459, and further supportEPA's action to disapprove theQualified Facilities submission.We find the Program is deficient forMajor NSR netting because it may allowan emission increase to net out bytaking into account emission decreasesoutside of the major stationary sourcetiand, in other circumstances, allow anevaluation of emissions of a subset ofunits at a major stationary source.' TheState failed to submit informationsufficient to demonstrate that theProgram includes the necessaryreplicability and accountability toprevent such circumvention. Therefore,the Program does not meet the CAA'sdefinition of "modification" and theMajor NSR SIP requirements and isinconsistent with Alabama Power v.Costle, 636 F.2d 32 3, 40 14 03 (DC Cir.1980) and Asarco v. EPA, 578 F.2d 320(DC Cir. 1978). 74 FR 48450. at 48458-48459.Comment: UT Environmental Cliniccommented that the Qualified Facilitiesnetting rules only allow consideration ofthe increase in allowable emissionsfrom the Qualified Facility undergoing achange, but consider the decreases fromany other Qualified Facilities at thesame account number. There is noconsideration of all the emissionincreases so there is no adequateimpacts analysis from the source.Response:Generally, these commentssupport EPA's analysis of Texas'sQualified Facilities I3rogram as a

substitute for a Major NSR SIP programas discussed in detail at 74 FR 48450,at 4845848459. and further supportEPA's action to disapprove theQualified Facilities submission.Major NSR netting is based upon allcontemporaneous increases anddecreases at the same major stationarysource that occur within a reasonableperiod that the states must define intheir approved SIPS. The submittedProgram's netting is not based upon allcontemporaneous increases at the samemajor stationary source and not alldecreases at the same major stationarysource. However, the State contendsthat the Program is not intended to*The Tnxas SIP defines an "accounl" o includean entire company site, which could in clu d~morethan one plant and certainly more than one n~njorstationary source. SIP rule 30 TAC 101.1(1),secondsentence.'Under the submitted Program. not all en~issionpoin ts, units. facilities, major stationnry sources. orminor modifications at the site or their inr ~ea sos nemiss ions are requimd to be evaluated in theapplicabilily netting analysis. S o the Pmgram failsto require the ovnlilation of emissions changes atthe antire major stationary source corred ly asrequired by the Major NSR SIP regulations. 74 FR48459.

0 Rules and Regulations-- -pply for Major NSK netting but only forMinor NSR netting. Moreover, theProgram is not intended to allowcontemporaneous netting. Instead, one

looks to the increases from the proposedchange and to decreases made at thesame time as the proposed change. Suchan approach, if fully delineated in theState's Program rules, would sa tis b theminimum requirements for anapprovable Minor NSR netting programprovided that the ambient air isprotected in consideration of all changesin the netting. Today's rulemakingdisapproves netting under the QualifiedFacilities Program as a Minor NSRprogram, in part because the Programfails to ensure that ambient air isprotected.Comment: UT Environmental Cliniccommented that the Qualified Facilitiesrules do not define a contemporaneousperiod nor require that emissionreductions occur within a specifiedperiod. EPA notes in the FederalRegister that Texas intended that anyrelied-upon reductions occursimultaneously with the increase.However, the commelrter argues thatnothing in the rule requires this.Response: We agree with thecomment insofar as it asserts that theProgram fails to define acontemporaneous period or require thatemission reductions occur within aspecified period. EPA finds that, whileTexas intended that any relied-uponreductions occur simultaneously at thetime of the increase,a the Program isdeficient because it does not expresslydefine the applicable period in whichthe reductions must occur. See ourresponse to the previous comment. 74FR 48450, at 48461.Comnient: UT Environmental Cliniccommented that because the QualifiedFacilities rules allow reductions to bebased upon allowable emissions, theydo not ensure that reductions are real.Response: We disagree that justbecause the reductions are based uponallowable emissions, these reductionsare not real. For example, reviewingauthority may presume that source-specific allowable emissions may beequivalent to the actual emissions. See40 CFR 5l.l65[a)(l)(xii)(C) nd51.166(b)(21)(iii).The commenter failsto discuss why the use of allowableemissions makes the reductions not real.Comment: The UT EnvironmentalClinic commented that the rules fail toensure that netted reductions arepermanent.Response: We agree with thecommenter that the Program lacks anyprovisions that require that the

HSee 21 T ex. Reg. 1573 (February 27.19 96) .


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Federal Register / Vol. 75reductions are permanent. Forreductions to meet the nettingrequirement to be permanent, the rulesmust include a prohibition againstfuture increases at the QualifiedFacility, or include regulatory languagethatassures that any future increase ata Qualified Facility at which a previousnetting reduction occurred is analyzedin totality to assure that the NAAQSremains protected b m he originalincrease. However, the submittedProgram does not include suchprovisions. Consequently, the QualifiedFacilities rules are inadequate becausethey fail to ensure that the reductionsare permanent.Comment:UT Environmental Cliniccommented that the rules do notprevent double counting of emissionreductions.Response:For an additional separateproject, it appears that the stateintended that the reductions must occurat the time of that additional project thatwill need to obtain additionalreductions to net out. If the regulatorytext was consistent with this approach,this limitation would prevent doublecounting of the netting reductions. TheState's intent is that the holder of thepermit is required to perform a new,separate netting analysis and rely uponreductions not relied upon in the firstnetting analysis. See 74 FR 48450. at48461 (citing21 Tex. Reg. 1573(February 27.1996); page 154 of the1996 SIP revision submittal). We agreethat the rules are not clear that asubsequent change at a QualifiedFacility that previously relied uponnetting must conduct a separate nettinganalysis that relies upon reductions thatwere not relied upon in the first nettinganalysis. EPA cannot find anyprovisions in the Program to ensure aseparate netting analysis performed foreach proposed change. Therefore, theProgram fails to prevent doublecounting; and consequently these typesof netting reductions are not enforceableas a practical matter at and after thetime of the actual change begins; andtherefore, not sufficiently creditable. 74FR 48450, at 48461.Comment:UT Environmental Cliniccommented that the Qualified Facilitiesrules fail to ensure that the emissionreductions are enforceable. Facilities~rov id e otice of changes to Oualifiedbacilities on Form PILE, whicG is notenforceable, and Qualified Facilitychanges that affect permitted facilitiesare not required to be incorporated intoa permit until renewal or amendment.TCEQ noted in its Qualified Facilityguidance that the form is not Federallyenforceable "but is simply a form toprovide information to demonstrate that

i, No. 71/Wednesday, April 14, 201(the change meets qualified facilityflexibility." Consequently. QualifiedFacility reductions are allowed toremain unenforceable for years. Further,Texas rules make it unclear whetheremission reductions are ever madeenforceable because a portion of thedefinition of "allowable emissions"states that "ltlhe allowable emissions fora qualified facility shall not be adjustedby the voluntary installation ofcontrols." 30 TAC 116.10(2)(F).Thisportion of the definition of "allowableemissions" states that "[tlhe allowableemissions for a qualified facility shallnot be adjusted by the voluntaryinstallation of controls." Additionally.there are no monitoring requirements inthe Qualified Facilities rules to trackcompliance with commitments toreduce emissions of limitations one~nissionsncreases.

Response: We agree that the QualifiedFacilities rules fail to ensure that theemission reductions relied upon in anetting analysis are enforceable. Wenoted at 74 FR 48450. at 48462 that therules do not require permits for theserelied-upon reductions. We also agreethat the Program does not requiremonitoring because no permit isrequired for each change. See SectionV.D.1 below.We disagree that 30 TAC 116.10(2)(F)makes the rules vague as toenforceability. This provision of the ruleis defining how to calculate the baselinefrom which reductions occur. Whencalculating the allowable emissions fora Qualified Facility participating in theProgram, one cannot count anyreductions occurring as a result of thevoluntary installation of controls.However, a facility can become"qualified" to use the Program byvoluntarily installing controls. Thereductions achieved by this voluntaryinstallation of controls are not countedin the Qualified Facility's allowableemissions.Comment:UT Environmental Clinicstates that the Qualified Facilities rulesdo not ensure that emission reductionshave the same health and welfare effectsas the emission increase. Because theprogram allows the emission increase tobe offset inside and outside the facility,it allows for emission increases close tothe fence line, potentially affectinghealth and welfare of the surroundingcommunity.Moreover, the Qualified FacilitiesProgram allows Qualified Facilities tooffset emissions increases of onepollutant with emission decreases ofanother pollutant, as long as thepollutants are in the same "aircontaminant category." The interchange

3 /Rules and Regulations 19479rnethodology established by TCEQ" toensure that compounds within theVOCs air contaminant category, asinterchanged, will have an equivalentimpact on air quality, is not included inthe Texas rules or statute. The rulemerely defines an "air contaminantcategory" as a group of relatedcompounds, such as volatile organiccompounds, particulate matter, nitrogenoxides, and sulfur compounds. 30 TAC116.116(e)(3)(F).Clearly emissions of allsulfur compounds, say sulfur dioxideand hydrogen sulfide, are not equal interms of health impacts. Likewise. thehealth impacts of fine PM emissions areof significantly greater concern than theim acts of larger particles.l e sponse:With regard to VOCs andnitrogen oxides, EPA disagrees with thecomment above that the Program isdeficient because the State's rules allowan offset of an emission increasepollutant with emission decrease ofanother pollutant, as long as thepollutants are in the same "aircontaminant category." The State'sinterchange methodology goes beyondthe fundamental principle to determinewhether the interchange of differentcompounds within the same airconta~ninant ategory will result in anequivalent decrease in emissions; e.g. ,one VOC for another VOC; for VOCs andnitrogen oxides. See 74 FR 48420. at48461.On the other hand, the term "sulfurcompoundsn in 30 TAG 116.116(e)(3)(F).is broad enough to include hydrogensulfide. The State failed to demonstratethat use of hydrogen sulfide wouldprotect the sulfur dioxides NAAQS.Therefore, we agree with the commenterthat the interchange methodology doesnot ensure the health impacts of allsulfur compounds will be equal. Withregard to the comment concerningparticulate matter, the definition of "aircontaminant category" allows PM-2.5 tobe interchanged with PM-10. However.because PM-10 and PM-2.5 are twoseparate pollutants and the State failedto demonstrate that such use of PM-10would protect the PM-2.5 NAAQS, thisinterchange is inappropriate. Therefore,we agree that the interchangemethodology does not ensure the healthimpacts of all particulate matter will beequal.We, however, disagree with thecomment above that the Program fails toensure that emission reductions havethe same health and welfare effects asthe emission increases. The State hasestablished a methodology to usewhenever there is a different location ofemissions because of the intraplant"See 74 FR 48455. n.3.


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Federal Register / Vol. 7- - - - - - - -- -- -that TCEQ's current rules areinsufficient to prevent circumvention ofMajor NSR. EPA disagrees with thecomments fiom TxOGA and TCC. Thesubmitted Program lacks specificrequirements that would require anowner or operator who proposes achange under the Qualified Facilitiesprogram to first conduct a Major NSRapplicability analysis (netting) prior toreceiving (or asserting) authorizationunder the Qualified Facilities Program.Comment: TCEQ commented that forfacilities undergoing an intraplant trade,where the allowable emissions at onefacility are increased while allowableemissions at another facility are reducedan allowable-to-allowable comparison isused only to determine if a newemissions increase has occurred forState purposes. The emissions arereviewed simultaneously,which is Inorestringent than the Federal requirementthat only requires contemporaneousemissions. If a net emissions increasehas occurred, an owner or operatorcannot use the Qualified FacilitiesProgram to authorize the proposedproject, and must find another Statemechanism to obtain properauthorization. In addition, thecommenter states that the owner oroperator rnust submit pre-changenotification if the intraplant trade movesemissions from the interior of a plantsite closer to a property line. This givesTCEQ staff the ability to evaluate publicprotectiveness and evaluate anypotential changes in off propertyimpacts as they relate to allcontaminants and pollutants withnational standards, i.e. the NAAQS.This intra lant trade capability onlyexists to tl e extent that the project is aMinor NSR action, and does not applyif a major modification has beentriggered under Federal NSRre uirements.%esponse:EPA disagrees with thecornmenter that under the Texas rulesthe Program's intraplant trading doesnot apply if a major modification hasbeen triggered. As stated above, theprogram fails to require a Major NSRapplicability analysis and is insufficientto prevent circumvention of Major NSR.Intraplant trading based on allowablesto allowables netting is prohibitedunder Major NSR. See State of NewYork etal., v. EPA, 413 F.3d 3,40 (DCCir. 2005). However, such netting maybe permissible for a Minor NSRprogram, provided that the nettingprovisions assure protection of theNAAQS. See 74 FR 48450, at 48462. Asdiscussed above, Texas's QualifiedFacilities Program does not meet thisrequirement. EPA also finds that theProgram does not adequately define a

'5, No. 71/Wednesday, April 14, 2010-- --contemporaneous (or simultaneous)period or require that ernissionreductions occur within a specifiedperiod. As discussed above, we find thatthe Program fails to meet the Minor NSRnetting requirement for a defined periodin which the reductions rnust occur.Comment: TIP and BCCA commentedthat t he Qualified Facilities programexceeds Federal benchmarks forallowable-based Minor NSR triggers.This program is one of the mechanismsthat EPA encouraged in its Flexible AirPermitting Rule (FAP) (74 FR 51418,15423). Further, the program is morestringent than the Federal FAP Programbecause it requires up-to-date BACT.The Qualified Facilities Program is alsocomparable to the proposed allowables-based minor NSR trigger in EPA'sproposed Indian Country rule, in whichEPA allows the use of allowables toallowables netting. To justify the use ofan allowables test, EPA distinguishedthe definition of "modification" underMinor NSR from that used for MajorNSR. 71 FR 48696,48701 (citing Stateof New York, et 01.. v. EPA (DC Cir. Jun.24, 2005)). The Qualified Facilities rulesmeet these criteria and are morestringent than the Federal modelbecause it only extends this flexibility towell-controlled facilities.The cornmenter reiterates that theQualified Facilities Program does noteffect a permit holder's obligation tocomply with Federal requirements. Anallowables-based trigger is permissiblebecause the CAA and Federalregulations do not mandate a method fordetermining minor NSR. TheEnvironmental Appeals Boardconfirmed that there is no mandatedmethodology for the emissions test usedfor minor NSR. In re Tennessee VolleyAuthority, 9 EAD 357,461 (EABSeptember 15, 2000). Again. EPAemployed an allowables-to-allowablestest in its proposed lndian Country rule.States have great flexibility to determineapplicability for Minor NSR and thatincludes the authority to use anallowables-based trigger. TCEQmlesarticulate an overriding obligation tocomply with Federal requirements. 30TAC 116.117(a)[4)and [d). Therefore,the current Qualified Facilities rulesprevent circumvention of Major NSR.Response: EPA disagrees with th ecommenter. This rulemakingdisapproves netting under the QualifiedFacilities Program for Major NSR, inpart because the Program fails to firstrequire a Major NSR applicabilitydemonstration to show that a proposedchange does not trigger Major NSRbefore the source can take advantage ofthe Program. In contrast to the QualifiedFacilities Program, under the proposed

/Rules and Regulations 19481Indian Country rule, 40 CFR 49.153would explicitly require the proposednew source or modification todetermine applicability to Major NSRbefore taking advantage of the prograIn.The source could only use allowablesnetting under the proposed IndianCounty rule aHer a Major NSRapplicability determination. See 71 FR48696, at 48705,4872848729 . TheQualified Facilities rules are deficientbecause they lack such a requirement.Further, as described above, theProgram fails to meet several othernetting requirements for an approvableMinor NSR netting program.EPA's FAP rule is an Operatingpermit under Title V, not Title 1. 74 FR51418.51419. While the FAP rulerecognizes the use of advance approvalprograrns under Minor NSR, the use ofsuch prograrns must ensureenvironmental protection andcompliance with applicable laws."[FAPs] cannot circumvent, modify, orcontravene any applicable requirementand, instead, by their design mustassure compliance with each one as itwould become applicable to anyauthorized changes." See 74 FR 51418,51422. Further, advance approval underthe FAP must be made at the time ofpermit issuance, and consider thealternate operating scenarios for airquality impacts, control technology.compliances with applicablerequirements, etc. Under Major andMinor NSR, advance approval mustensure compliance with control strategyand non-interference with attainmentand maintenance of NAAQS for eachoperating scenario as required by 40CFR 51.160. We do not see how theTexas mal ifi ed Facility Rule meetsthese requirements.13.Comments Addressing Whether theQualified Facilities RulesA rePractically Enforceable1.Comments Generally SupportingProposal

Comment: The UT EnvironmentalClinic commented that the rules fail toensure that netted reductions areenforceable.Response: We agree with thecommenter that the Program isunenforceable because it fails toexplicitly require that a permitapplication must be submitted for thechange and for any relied-uponemissions reductions in the nettinganalysis. Because the Program is anexemption from a preconstructionpermit, and does not require a permit,the Program must qualify as a deminimis exemption to be approvable.We find that the Program does not


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19482 Federal Register / Vol. 7qualify as a de miniinis exemption fromMinor NSR. The legal test for whethera de minimis threshold can be approvedis whether i t is consistent with the needfor a plan to include legally enforceableprocedures to ensure that the State willnot permit a source that will violate thecontrol strategy or interfere withNAAQS attainment, as required by 40CFR 51.160(a)-b). 74 FR 48450, at48460. The State failed to demonstratethat this exemption will not permitchanges that will violate the Texascontrol strategies or interfere withNAAQS attainment. Therefore all of therequirements under 40 CFR 51.160(a)-ly to the Program.(b)ag.A it~onally,he Program allows toolong of a lag time before a revisedpermit is issued in certaincircumstances that can lead to aviolation of a NAAQS. RFP, or controlstrategy without the TCEQbecomingaware of it in a timely manner. Weproposed that the lag time for reportinga change under the Program should beno longer than six months, rather thana year, but we requested comment onwhether six months is an acceptablelapse of time to ensure noninterferencewith the NAAQS and control strategies.74 FK 48450, at 48462. We received nocomments on this issue except thatTCEQ tated theg will consider thischange during rulemaking. Ther

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